China Proposes Tax Changes to Boost Fuel-efficient, Clean Cars

As part of 'carrot and stick' approach, punitive taxes will be imposed on those cars that fail to meet the fuel consumption standard. The taxes may be in the form of consumption tax and car purchase tax or in other forms.

Published: 24-Jan-2007

The Ministry of Finance and the State Administration of Taxation will work
out measures to give tax breaks to energy-saving and environmentally friendly
autos.

Vehicles that meet both the China II fuel efficiency standard and the China
III emissions standard will be encouraged by the State. A more detailed index
will also be introduced to measure energy efficiency and environmental
friendliness.

A recent notice by the National Development and Reform Commission also
pointed out that the government will publicize fuel consumption standards for
light and large-sized commercial vehicles as soon as possible.

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